Background Behind The Sale of Runnells Hospital to Center Management


In a press release issud by the County of Union on Monday, Dec. 15,  regarding the sale of Runnells Specialized Hospital to Center Management, they provided the following facts regarding the background and process of the sale.

Background and Process 

Facing an uncertain financial future of declining Medicare and Medicaid reimbursements, the County of Union in 2012 retained Complete HealthCare Resources-Eastern, Inc. to independently and objectively analyze and evaluate possible options for the Hospital. The study was to seek ways to reduce costs and enable the Hospital to react to a changing health-care environment by determining if and how Hospital operations could continue in the present environment and the future in light of  the anticipated reduction in the Medicare/Medicare reimbursements and increases in the County's subsidy of the Hospital.

Sign Up for E-News

After analyzing the operations of the Hospital, CHR issued a report in January, 2013, which concluded that due to declining reimbursements, decreasing occupancy rates and Medicare census, rising employee and operational costs and capital expense requirements, the County should consider several options for the continuation of the Hospital, such as revenue enhancements, expense reductions and alternative ownership.

Based upon the conclusions and recommendations of the CHR Report, the County determined to explore transferring the Hospital operations to the Union County Improvement Authority for the possible transfer of such operations to a third-party, while simultaneously evaluating methods of revenue enhancement and expense reduction.

The Authority is authorized to cooperate and plan with the County for the acquisition or operations of a public facility such as the Hospital, including the purchase of the County's rights, title and interest in the Hospital and the possible sale and lease back of the Hospital operations to a third party to provide for the continuous public operation of the Hospital.

Later in 2013, as authorized by their respective resolutions, the County and the Authority entered into a Memorandum of Understanding,  pursuant to which the Authority was required to undertake a Request for Qualifications and Proposals ("RFQ/P") process seeking a private provider that wished to purchase or lease the Hospital.

The Authority then established a Review Committee, which included representatives from the County and the UCIA, for the RFQ/P process, and which received five (5) proposals in December 2013, four (4) of which were for the purchase of the Hospital and one of which offered a lease option, and the Committee determined to proceed to interview four (4) of the proposers having found one (1) proposal incomplete.

The Review Committee interviewed the Proposers at least twice, and has, in compliance with the requests and suggestions of  the Board of Chosen Freeholders, sought additional information from the Proposers, and allowed the Proposers to make revised offers.

The Review Committee sought and received an independent appraisal of the Hospital, which appraised value was determined to be $26,000,000 and the Review Committee finally presented the Proposers with a series of questions and also requested that they provide a "best and final offer" to purchase the Hospital.

By the end of February, 2014, the proposers submitted responses and their best and final offers to the Review Committee, and the Committee prepared a report of the proposers, proposals, and a recommendation of one of the Proposers, Center Management Group, with which to negotiate a contract of sale of the Hospital.

In November, the County decided to pursue a lease back of the Cornerstone Psychiatric Unit of the Hospital after the state advertised for private companies to run the psychiatric unit, seeking to lower costs, and Center Management was unsuccessful in obtaining an agreement with the state. State reimbursements for psychiatric care are expected to keep net costs for running Cornerstone at about $700,000 annually, the same amount currently spent for the unit.

TAP Into Another Town's News:

You May Also Be Interested In

Sign Up for E-News

Berkeley Heights

'Tired of cronyism? Yeah, us too'

July 21, 2018

The Union County Freeholders’ decision to appoint State Senator and newly-elected Union County Democratic Chairman, Nick Scutari’s chief of staff, Ed Oatman as County Manager smelled of corruption from the start. To place a political consultant like Oatman in the role of overseeing 2,800 employees and running the day-to-day operations of the $500 million county budget suggests ...

TAPinto Spotlight on Business Features New Providence Dentistry

July 17, 2018

NEW PROVIDENCE, NJ - TAPinto "Summer Spotlight on Business" features local businesses and their owners who are important to our communities. Follow this column to receive a fresh perspective on small business owners and their unique needs while shining a spotlight on their stories.

This edition features New Providence Dentistry, operated by Dr. Beth Herko and her staff of ...

Avoiding 10% Tax Penalty

Do you want access to money from your retirement accounts but aren't sure of the real costs involved?

Most retirement accounts have a set age requirement you must reach before making penalty-free income distributions, which is usually 59.5 but can sometimes be as early as age 50. If you decide to access your accounts earlier, you could face penalties ranging from 10%-25%, which is not ...

Drive for Autism Foundation to hold Seventeeth annual Drive for Autism Golf Event

July 23, 2018

NEW PROVIDENCE, NJ – The Drive for Autism Foundation is pleased to announce that its annual golf event Drive for Autism XVII will be held at Royce Brook Golf Club in Hillsborough, NJ on September 17, 2018.

The Drive for Autism Golf Outing which has been held since 2002 has raised and distributed over $700,000 to local school programs. Previous beneficiaries of grants were ...

Step Up and Build a Stronger Union County

Union County residents who are seeking a meaningful, high-impact way to volunteer in their community can sign up as a mentor with Big Brothers Big Sisters of Essex, Hudson and Union Counties.

The organization is currently seeking volunteer mentors for its best-known program, Community Based Mentoring. The program involves individual mentoring with a local child or teen, age 6 to 18, with a ...

Shakespeare in the Park(ing Lot)

BERKELEY HEIGHTS, NJ — The Shrewd Mechanicals from the New Jersey Shakespeare Theatre will perform Shakespeare Gumbo in the parking lot of Berkeley Heights Public Library, 110 Roosevelt Ave.,  on Friday, July 27, at 7:00 pm. 

Bring lawn chairs.  Change of location will be announced in case of inclement weather.

Mayors Push for Law Permitting Driver's License for Immigrants

July 22, 2018

PERTH AMBOY, NJ - Five mayors from northern and central New Jersey today called for passage of a state law permitting immigrants to get driver's licenses even if they are undocumented, saying it boosts public safety as well as the economy.

"This is important for every resident for a better life and a better life for the state of New Jersey," said Perth Amboy Mayor Wilda ...

Upcoming Events


Tue, July 24, 3:00 PM

Grillestone Restaurant , Scotch Plains

Hear the Story of Amelia Earhart, America's Most ...

Arts & Entertainment Food & Drink


Tue, July 24, 5:30 PM

Summit YMCA, Summit

Summit Area YMCA Swim Team Tryouts July 24th

Health & Wellness


Tue, July 24, 5:30 PM

Summit YMCA, Summit

Summit Area YMCA Swim Team Tryouts July 24th

Health & Wellness


Wed, July 25, 1:30 PM

Trailside Nature & Science Center, MountainsidE

Trailside’s Annual Summer Wednesday Matinee ...

Arts & Entertainment Education

Wed, July 25, 7:30 PM

Chatham United Methodist Church, Chatham

Masterwork’s Summer Sings Conclude with Verdi ...

Arts & Entertainment


Wed, July 25, 7:30 PM

Memorial Park, Berkeley Heights

2018 Berkeley Heights Summer Concert Series

Arts & Entertainment

And Over Here is the Dining Hall 2

My very first job in admissions was while I was still an undergraduate myself as a tour guide.  Very early on they indoctrinated us with some tricks of the trade.  It’s a dining hall, not a cafeteria.  A residence hall, not a dorm.  If you have to divulge some negative bit of information, sandwich it between two positives.  There were instructions for glossing over ...

Women Have Special Financial Needs That Advisors Overlook

Women have special financial needs that advisors overlook in two ways: 1) advisors don’t always acknowledge the different planning needs women have and 2) advisors don’t always communicate well with female clients – especially if the client comes to a meeting with her husband. It’s very common for a male advisor to spend much or most of the face time in meetings talking to ...

Summer Storm Checklist

New Jersey gets its share of severe weather – and those closest to the coast are particularly vulnerable to hurricanes and high winds. Here are some things you can do to help improve the safety of your family and home before a storm hits:

·       Be informed. Find out where the nearest shelter is, and map out different routes you can take ...